There are two distinct job markets. The public one is comprised of the 5.6 million open jobs anyone can find on the job boards. However, before each one of these jobs is formally approved and posted, hiring managers try to fill these jobs internally or by getting a referral from a trusted source. During the process these jobs are often modified to better fit the person hired or promoted into the role. As a result these jobs are more satisfying, performance is higher and turnover is far less.

The process used for hiring people in this hidden, semi-official job market provides tantalizing clues on how hiring could be done in the public arena. In fact, in Harvard professor Todd Rose's new book, The End of Average, he demonstrates that current hiring processes are fundamentally flawed and offers this type of guidance to correct the situation.

According to Rose, defining average jobs and attempting to fill them with above average people is destined to fail since no one is average. Rose offers a solution: Modify the job to fit the person; don't force fit the person to the job. As a result, you'll improve Quality of Hire, increase job satisfaction, reduce turnover and improve performance. While an interesting concept, achieving it requires some fundamental process changes. Despite this, the current process companies now use to promote people internally and hire high-quality external referrals is a workable and scalable solution. More important, the changes will result in a stronger and more diverse workforce.

Here are the big points to consider in order to make this shift from a skills and experience based hiring model to one based on individual performance and upside potential.

Companies already promote people who are light on skills and experience.

The basis for promoting someone internally is based on his or her past performance and ability to handle stretch assignments. More important, the person's performance is highly predictable. By definition, these people don't possess the full set of skills and experiences demanded of outside hires. External candidates can and should be assessed the same way: on their past performance, their rate of change of growth and their upside potential.

Performance is more important than behaviors.

To get promoted into bigger roles. internal candidates are not assessed using behavioral interviewing or screened using some psychometric test. A Performance-based Interview benchmarking the external candidate against the performance requirements of the position is one way to better evaluate unknown candidates using a similar process for evaluating known internal candidates.

Customize the job to fit the person interests and abilities.

The jobs internal candidates are assigned to are designed to broaden their skills and experiences. It's the exact opposite for external candidates. They're force-fit into ill-defined jobs based on their current level of skills and experiences. In this case success, satisfaction and performance is problematic.

The shift to a better approach starts by combining related jobs (e.g., all staff engineers) into broader categories. This way you'll be able to attract more people and better match the candidates' abilities and motivating interests with your open jobs. You might also redesign some of these jobs to better fit the person. For example, a brilliant two-year staff engineer might be able to handle the design aspects of a five-year person but be less capable of handling the project management challenges. Modifying jobs this way opens up the talent pool to more diverse, high potential and non-traditional candidates.

The Performance of Known Candidates is More Predictable than Unknown Candidates

These are important changes to make and not difficult to implement. Making the changes starts by recognizing that known candidates for open jobs (current and previous employees and referrals) are evaluated differently than unknown candidates. More important, the predictability of the known candidate's performance is far greater than the unknown person's. Based on this fact alone it seems logical that the methods used to find, hire and evaluate known candidates should be applied to unknown candidates.

Whether you look at Professor Rose's work, Gallup's report on the causes of employee underperformance or Google's Project Oxygen, it's clear that current hiring processes used by the majority of corporations in the world today are fundamentally flawed. To me it's time for HR and business leadership to recognize this truth and implement programs that focus on better matching people with jobs that maximize their ability, performance and satisfaction. It starts by breaking free from outdated thinking that relies on statistics, compliance and force fitting people into ill-defined jobs. The truth is out there, you just need to know where to look.